Carter's Benefits

eNewsletter Volume 4, Issue 3 March 2011

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Texas Looses Another Carrier

Another carrier leaves Texas. Today a letter arrived on my desk from CIGNA Healthcare. As of March 15, 2011 they will no longer insure small businesses with less than 50 employees in the State of Texas. We have now lost CIGNA, Principal, Unicare, and Guardian. The market for employer and individual healthcare coverage has always been small and it is growing smaller and smaller very rapidly.

Recent News

  1. Deficit Discussions May Impact Healthcare Debate.
  2. States Unsure About Implementing Law Following Vinson's Ruling.
  3. House Republicans Contemplate Adding Limits To Medicare, Other Entitlement Programs.
  4. Sebelius Addresses Concerns About CLASS Act.
  5. Healthcare Law Being Implemented Despite Repeal Attempts.
  6. Texas Lawmakers Struggle To Cut Medicaid Spending.
  7. Study Estimates 19 Percent Of Imaging Tests Conducted For "Defensive" Purposes.
  8. Administration Asks If Vinson Meant To Prevent Health Reform Implementation.
  9. House GOP Votes To Defund Healthcare Law.
  10. Judge Rejects Lawsuit Challenging Individual Mandate.
  11. HHS Announces Grants For Reviews Of Insurance Rates.
  12. Regulators' Definition Of Essential Services Expected To Draw Controversy.

Deficit Discussions May Impact Healthcare Debate.
CQ HealthBeat (1/29, Reichard, subscription required) reported, "It's pretty clear by now that worries over deficit spending are going to frame Washington's big policy debates in the coming year. And healthcare is at the top of the list." CQ added, "Already, cost issues have dominated discussions over changing parts of the new health law -- or getting rid of it altogether," since "supporters of the law argue that it will save money over the long run, and opponents say the law will add to the government's healthcare spending." Meanwhile, deficit discussions may impact other aspects of healthcare, such as "taxing healthcare benefits, restructuring Medicare and overhauling all of healthcare to be based on a 'defined contribution system' -- which essentially means less generous health benefits."

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States Unsure About Implementing Law Following Vinson's Ruling.
The New York Times (2/2, A16, Sack, Herszenhorn, Pear) reports, "States took broadly divergent approaches on Tuesday to a federal judge's ruling that invalidated the Obama healthcare law, while Congressional Republicans used the decision to build momentum for a vote on repealing the act." Although the "Senate's Democratic leaders answered the Republican challenge by saying they would stage a vote on the repeal measure on Wednesday, when they were certain it would be defeated," in some of the "states that are party to the litigation, Republican governors and attorneys general declared the expansive healthcare law effectively null as a result of the judge's ruling." Meanwhile, HHS spokesman Richard Sorian said that as a result of the ruling, "there has not been any effect on the work being done by this department."

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House Republicans Contemplate Adding Limits To Medicare, Other Entitlement Programs.

The Wall Street Journal (2/3, Hook, subscription required) reports that House GOP leaders are banking on an assumption that voters are more concerned about reducing the federal budget deficit than they are about retaining government benefits. Therefore, some Republicans are considering placing limitations on entitlement programs, including Medicare. The Journal quotes Rep. Devin Nunes (R-CA), who sits on the committee that oversees Social Security and Medicare, as saying, "I believe strongly that we have to act on entitlement reform, and we have to do it sooner rather than later." However, according to the Journal, most cuts will have minimal impact on the overall deficit, which is expected to reach $1.5 trillion this year, especially considering that discretionary spending comprises about 33% of the federal account. Notably, Social Security, Medicare and Medicaid account for more than 60% of the budget.
        CQ HealthBeat (2/2, Norman, subscription required) reports that "state lawmakers in session around the nation have begun work on dozens of bills they would need to pass in order to comply with the law," and while "some states that are plaintiffs in the suit appeared ready to stop implementing the measure...details of how they would do that and for which parts of the law was not clear." CQ quotes Wisconsin Attorney General J.B. Van Hollen as saying, "This means that, for Wisconsin, the federal healthcare law is dead -- unless and until it is revived by an appellate court. ... Effectively, Wisconsin was relieved of any obligations or duties that were created under terms of the federal healthcare law."
        The Wall Street Journal (2/2, Kendall, subscription required) reports that because of Judge Roger Vinson's ruling, the 26 states involved in the suit against the healthcare law are considering whether to request an expedited hearing from the Supreme Court. Bloomberg News (2/2, Harris, Fisk), the Washington Post (2/2, Sargent) "The Plum Line" blog, and the Wall Street Journal (2/2, Jones) "Law Blog" also cover the story.

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Sebelius Addresses Concerns About CLASS Act.
GOP Governors Ask Sebelius To Modify Rules On Health Exchanges.
The AP (2/8) reports, "Indiana Gov. Mitch Daniels and 20 other Republican governors are asking US Health and Human Services Secretary Kathleen Sebelius to make changes in parts of the federal healthcare overhaul that they feel put states at a disadvantage."
Fox News' Special Report (2/7, Baier) reported, "Already repealed in the House and on its way to the Supreme Court, the President's healthcare law is facing a new challenge" as 21 Republican governors are "pressing the Obama administration to make big changes" to it.
Politico (2/8, Kliff) reports, "Republican governors want HHS Secretary Kathleen Sebelius to make specific changes to the new health exchanges, and have threatened to pull back on running their own exchanges if their demands are not met." They wrote to Sebelius saying, "While we hope for your endorsement, if you do not agree, we will move forward with our own efforts regardless and HHS should begin making plans to run exchanges under its own auspices." In response to the letter, HHS spokeswoman Jessica Santillo said that since the healthcare law "was enacted, HHS has made resources available to the states to both plan and establish exchanges and made clear we will consider different models that fit states' needs. We look forward to continuing to build a constructive partnership with governors and state leaders."
The Hill (2/8, Millman) reports in its "Healthwatch" blog that the "21 Republican governors recommended six major improvements for state-run exchanges that would give the states more decision power," such as "the choice of which insurers can offer products; waive mandates and allow states to choose benefit rules; waive provisions discriminating against consumer-driven health plans, such as health savings accounts; allow the flexibility to move non-disabled Medicaid beneficiaries into exchanges; deliver a plan for verifying incomes and subsidy amounts for exchange participants; and commission a 'new and objective' assessment of how many people will enroll in exchanges and Medicaid as a result of the reform."
CQ HealthBeat (2/8, Adams, subscription required) reports, "The governors also warn federal officials that failure to give states more authority over the exchanges will mean 'HHS should begin making plans to run exchanges under its own auspices.' The law gives governors a choice of operating the exchanges themselves or allowing federal officials to run them."

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Healthcare Law Being Implemented Despite Repeal Attempts.
American Medical News (2/14, Trapp) reports, "With an outright repeal of the national health system reform law blocked by the Senate, congressional Republicans aim to make 2011 a year of rolling back individual parts of the statute." Still, "key portions of the law are expected to take effect or move forward significantly this year despite any GOP efforts to cripple it," the article notes. "At this article's deadline, the Dept. of Health and Human Services was preparing to unveil rules governing accountable care organizations, one major aspect of the reform package for physicians," American Medical News adds.

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Texas Lawmakers Struggle To Cut Medicaid Spending.
Dallas Morning News (2/15, Garrett) reports Texas lawmakers have found that "cutting Medicaid is harder than it sounds." GOP leaders in the state have proposed cuts of 29%, saying "the beast must be tamed." Medicaid costs in Texas grew rapidly when Congress "temporarily enhanced federal matching money" during the recession. According to the Dallas Morning News, Tom Suehs, executive commissioner of the Health and Human Services Commission, has "promised to recommend by Wednesday how lawmakers might 'ratchet back' but not eliminate certain services."

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Study Estimates 19 Percent Of Imaging Tests Conducted For "Defensive" Purposes.
The Los Angeles Times (2/15, Roan) "Booster Shots" blog reported, "Imaging tests such as MRIs and X-rays frequently are performed so that doctors can protect themselves from lawsuits," according to research presented at the annual meeting of the American Academy of Orthopaedic Surgeons in San Diego. The review of "2,068 orthopedic patients" showed that "19% of the tests were ordered for 'defensive' purposes." Medical malpractice lawsuits "often hinge on charges that the doctor should have ordered more tests," said lead author Dr. John Flynn of Children's Hospital of Philadelphia. Such a claim "may be the driving force of so much of the defensive test ordering," he noted.

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Administration Asks If Vinson Meant To Prevent Health Reform Implementation.
The New York Times (2/18, A19, Sack) reports, "The Obama administration asked a federal judge on Thursday to clarify whether his recent ruling against the new healthcare law was meant to block its implementation pending appeals." Judge Roger Vinson, of Federal District Court in Pensacola, FL, "ruled on Jan. 31 that the provision requiring most Americans to obtain health insurance was unconstitutional, and that the entire Affordable Care Act was therefore invalid. While the judge did not specifically enjoin the law, he suggested that his ruling should be treated as the 'functional equivalent' of an injunction."
        Politico (2/18, Haberkorn) reports, "In a motion, the department asked Judge Roger Vinson to clarify that his ruling 'does not relieve the parties of their rights and obligations under the Affordable Care Act,' while the case is being appealed." Notably, "some legal scholars and opponents of the law, including the governors of Alaska and Florida, believe the ruling has the effect of an injunction against the law, though Vinson declined to issue one." But, HHS "has said implementation would move along as planned."
        According to the AP (2/18, Nelson), the Administration argues that "at stake...are provisions of the new law that would create chaos if ignored by the states." These "include 2011 changes in Medicare payment rates," and "delaying those changes 'could cause major delays and errors in the payment of the roughly 100 million Medicare claims processed each month.'"
        The Wall Street Journal (2/18, Kendall, subscription required) quotes Justice Department spokeswoman Tracy Schmaler as saying that, in the motion, the Administration asked Vinson "to confirm that the court did not intend to disrupt the many programs currently in effect, including small business tax credits, the millions of dollars in federal grants awarded to states to help with healthcare costs and other ongoing consumer protections while this case is on appeal." Schmaler added, "We believe it is important to put to rest any doubts about the ability of states and other parties to continue to implement these critical programs and consumer protections provided under this statute."
        Bloomberg News (2/18, Harris, Schoenberg), The Hill (2/18, Millman) "Healthwatch" blog, CQ HealthBeat (2/18, Norman, subscription required), and TPM Media (2/18) also cover the story.
        Conrad Suggests Renewing Healthcare Debate. The Hill (2/18, Bolton) reports, "Unshackled by the need to get reelected, Sen. Kent Conrad (D-N.D.) suggested Thursday that Democrats reopen the bitter healthcare debate, arguing that the reform law's provisions could yield opportunities to cut the federal deficit." However, "several Democratic colleagues rejected the idea -- it did them enough damage in the last election cycle -- over worries that those facing re-election in 2012 could be faced with a storm of negative political ads." For instance, Sen. Ben Nelson (D-NE), "who is expected to face a tough campaign," argued, "All you do is give your opponents a chance to misinform again."

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House GOP Votes To Defund Healthcare Law.
Politico (2/19, Nather) reported, "The House voted Friday to block funding for the healthcare law in several ways -- starting the countdown to the defunding clash with Senate Democrats and President Barack Obama. As expected, lawmakers approved Rep. Denny Rehberg's amendment to the continuing resolution, which bars all payments to 'any employee, officer, contractor, or grantee of any department or agency' to implement the law." Rehberg's amendment specifically targets HHS and the Labor Department. In addition, GOP lawmakers "gave unexpected victories to Steve King of Iowa, approving broader measures to deny any implementation funds in the continuing resolution and block salaries to enforce the entire law."
CQ Today (2/19, Weyl, subscription required) quoted Rehberg, "chairman of the Appropriations subcommittee that oversees" HHS, as saying, "This amendment can slow but not completely stop the process. ... I've tried everything within my power to write an amendment that would completely defund implementation, yet withstand a point of order." CQ noted that "debate echoed arguments lawmakers have made over the last two years. Republicans charged the law is an unconstitutional government takeover of healthcare and a budget-buster, while Democrats blasted attempts to eliminate consumer protections, such as allowing individuals with pre-existing conditions access to health coverage."
The Hill (2/19, Pecquet) reported in its "Healthwatch" blog, "The continuing resolution faces high hurdles in the Democrat-controlled Senate. And President Obama announced he 'strongly opposes' it before the new amendments even passed." In fact, the Administration stated, "If the president is presented with a bill that undermines critical priorities or national security through funding levels or restrictions, contains earmarks, or curtails the drivers of long-term economic growth and job creation while continuing to burden future generations with deficits, the president will veto the bill."
The Wall Street Journal (2/19, Zibel, Kendall, subscription required) also reported on the vote to defund the healthcare law, and pointed out that, for the most part, lawmakers voted along party lines. Reuters (2/19, Cowan, Ferraro) also covered the story.

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Judge Rejects Lawsuit Challenging Individual Mandate.
The latest ruling in a case challenging the healthcare law is being hailed as another victory for the Obama Administration, although sources agree that these cases will ultimately be decided by the Supreme Court. Television stations eschewed coverage of the ruling, but print media sources covered it extensively.
The AP (2/23, Pickler) reports that US District Judge Gladys Kessler "on Tuesday threw out a lawsuit claiming that President Barack Obama's requirement that all Americans have health insurance violates the religious freedom of those who rely on God to protect them." Kessler "dismissed a lawsuit filed by the American Center for Law and Justice, a Christian legal group founded by evangelist Pat Robertson, on behalf of five Americans who can afford health insurance but have chosen for years not to buy it." Kessler is "the third Democratic-appointed judge to dismiss a challenge, while two Republican-appointed judges have ruled part or all of the law unconstitutional."
Ben Smith writes in his Politico (2/23) blog, "The perfect partisan streak in healthcare rulings continues, with D.C. federal district judge Gladys Kessler, a Clinton appointee, ruling the Affordable Care Act constitutional."
The New York Times (2/23, A14, Sack) reports, "Judge Kessler adopted the government's position on whether Congress's authority to regulate interstate commerce is so broad that it can require people to buy a commercial product." The Times adds, "Although the issue will almost certainly be determined by the Supreme Court, each lower court ruling contributes to the balance of legal opinion that the justices will consider." Notably, "past Supreme Court decisions have established the standard that Congress can control 'activities that substantially affect interstate commerce.'"
The Wall Street Journal (2/23, Kendall, subscription required) quotes Kessler as saying in her 64-page opinion, "Congress had a rational basis for its conclusion that the aggregate of individual decisions not to purchase health insurance substantially affects the national health insurance market. ... Consequently, Congress was acting within the bounds of its Commerce Clause power." Meanwhile, Justice Department spokeswoman Tracy Schmaler hailed the ruling, and said that the Administration intends to "continue to vigorously defend this law in ongoing litigation."
Bloomberg News (2/23, Schoenberg, Harris) reports that Kessler also wrote, "The individual decision to forgo health insurance, when considered in the aggregate, leads to substantially higher insurance premiums for those other individuals who do obtain coverage. ... Thus, the aggregate effect on interstate commerce of the decisions of individuals to forgo insurance is very substantial." The National Journal (2/23, Brownstein, subscription required) and the ABC News (2/23, de Vogue) "The Note" blog also cover the story

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HHS Announces Grants For Reviews Of Insurance Rates.
The Hill (2/25, Millman) reports in its "Healthwatch" blog, "States can apply for $200 million in healthcare reform grants to develop programs preventing 'unreasonable' health insurance rate hikes, the Department of Health and Human Services announced Thursday." The healthcare law "requires health insurers in the small-group and individual markets to justify rate hikes deemed unreasonable." Steve Larsen, director of HHS's Center for Consumer Information and Insurance Oversight, said, "We know that rate review is an extremely effective tool to benefit consumers," and "our preference and desire is for states to be in a position to be the reviewer of rates."
        Modern Healthcare (2/25, Vesely, subscription required) reports, "There are new four grant categories for the new funding totaling $199 million. The first grants are three-year 'baseline' grants of $3 million per state." Next, states can apply for two-year baseline grants . And, "states can...get added funding in two areas: 'Workload grants' totaling $22.5 million to states with large populations and multiple insurers, and 'performance incentives' totaling $27.5 million to states that have the statutory authority to approve or reject insurance rate increases."

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Regulators' Definition Of Essential Services Expected To Draw Controversy.
The Wall Street Journal (2/28, Johnson, subscription required) reports that as the healthcare law is implemented, a new area of controversy is growing around the services that regulators define as "essential," which insurers must cover. The law defines ten categories of care, and regulators need to flesh out which specific services are included as "essential." The Journal notes that insurers are seeking to define the services narrowly, and warn that expansion of the scope of coverage will result in an increase in costs. One potential flashpoint noted in the story are rehabilitative services offered for children with autism, which can provide critical life skills, but are expensive.

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How does Carter's Benefits help ?
We continue to stay on top of changes in this industry. In a consultative role, Eddie Carter has begun hosting live seminars to update employers and Human Resource Managers on these changes. If you would like to host a meeting with your local community or civic organization, please contact me for details.

Eddie Carter, Consultant Eddie Carter,
Benefit Consultant
Questions@CartersBenefits.Com
 
 
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